Benefits For The Gig Workforce: Is There A Solution That Won't Defeat The Business Model?

Offering health, retirement, and workers' compensation benefits to the varied gig workforce, while maintaining some affordability to the worker while also avoiding the 30 percent cost increase to businesses, has proven to be an extremely tall task. The situation gets even more complicated because gig businesses also need to be concerned that charges of worker misclassification could be supported by the offering of such benefits to their contractor workforce.

But the murmur of discontent and concern from workers and their advocates is growing louder, as the frustration with legislatures' and regulatory agencies' inability to tackle even the classification issues seems to have reached a highpoint. Increasingly, however, proposed solutions from various sources are coming to the fore, as federal and state legislators, union heads, industry think-tanks, and astute observers of business trends are all chipping in with possible solutions.

Recently, Aakash Kumar explored the issue of gig worker benefits provision in an article posted on Forbes.com. Mr. Kumar noted the challenge, and particularly maligned the inability (or failure) of unions to bargain collectively on behalf of gig workers. But he notes that efforts have recently been undertaken at the federal level to design and test new models for portable benefits.

In a previous post here, I noted that legislation at all levels allowing labor law waivers would drive a more responsive and targeted change for the gig economy. State legislators, too, are attempting to tackle the issue. In Washington, for example, Representative Monica Stonier and others have proposed legislation for a "portable benefits fund" policy that would require employer contributions to a state-run "benefits fund that would provide contributions towards health insurance, paid time off, retirement and workers' compensation insurance," while allowing the company to stay out of the benefits administration game. The obvious challenge to the company is retaining the pay levels necessary to attract talent while also contributing to a benefits fund.

The solutions, however, are being led by the private sector. As I noted in November, Andrew Stern and Eli Lehrer's proposal to allow unions to administer worker benefits plans for members and non-members...